The Gross Profits to Assets, or GPA, is used to help determine how efficiently a firm uses its assets to generate Gross Profits. It is calculate as Gross Profits divided by the firm’s Total Assets. This is measured on a TTM basis.
Gross profit is sales less the cost of sales or cost of goods sold (COGS).
It only nets off the cost of the materials or labor used to make the products sold or the services delivered.
The ratio then divides gross profit by assets to try and measure how productively assets are being used in the company.
A double digits figure is taken to be indicative of a productive, efficient company that may have a competitive advantage.
This ratio is used extensively by Robert Novy-Marx in his research into quality investing.
He finds it to be a superior indicator of the quality of a given company.
| Ticker | Name | GPA | StockRank™ |
|---|---|---|---|
| LON:MIND | Mind Gym | 269.48% | 10 |
| LON:AMIF | Amicorp FS (UK) | 173.91% | 35 |
| LON:GETB | Getbusy | 167.86% | 29 |
| LON:FOUR | 4imprint | 151.44% | 80 |
| LON:SYS1 | System1 | 136.83% | 63 |